Contracting in a Tight Labor Market

David Williams is an attorney in the Salt Lake City office of Stoel, Rives, LLP. He is in their construction and design practice group.

He wrote an article dated June 7, 2018 for the Idaho Business Review (paid subscription required). It was titled: “Two key contract provisions implicated by the labor shortage.” It is a very helpful analysis of how our tight labor market increases a construction contractor’s performance risk. I encourage everyone who is involved in or impacted by the construction business to read that article.

Construction is one of many industries experiencing labor shortages. I speak with people in everything from aerospace to health care to software development, and the story is the same. Employers are sweetening their compensation packages in the short run and collaborating on long-term efforts to grow the pool of skilled workers.

Are you running into trouble meeting your contractual delivery obligations? I recommend you look at the applicable contract to see what your obligations are. You might be required to give notice to your customer as soon as you know or should know that you are likely to be late.

Even if you don’t have a clear requirement to give such a notice, consider at least giving your customer an informal heads-up. You can avoid a lot of pain (maybe even a lawsuit) later if you get the customer involved in joint problem-solving sooner.

You might also want to adjust your standard bidding procedures to build in longer delivery times. There is no point in setting yourself up for failure and your customer for disappointment!

Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.